Mahmed Akhtar Husein (alias) Kadar Bhatti vs State of Gujarat and Others

S.B. Majmudar, J.—These three special criminal applications under articles 226/227 of the Constitution have been moved by the same petitioner - Mahmed Akhtar Husein alias Kadar Bhatti (a Pakistani national) against the concerned respondents - out of which the main respondents are - State of Gujarat, Commissioner of Income Tax and the Tax Recovery Officer, No. 2, Income Tax Office, Ahmedabad. The grievances voiced in these petitions center round the arrest and detention of the petitioner in civil prison as he is said to have defaulted in paying Income Tax dues of Rs. 6,69,635 for the assessment year 1984-85. The petitioner was earlier ordered to be arrested under the provisions of rule 73(2) of the Second Schedule to the Income Tax Act, 1961, by orders dated December 5, 1989, and December 22, 1989, issued by the Tax Recovery Officer II, Ahmedabad, and was later ordered to be kept in interim custody pending inquiry by order dated December 30, 1989, passed by the same officer in exercise of his powers under rule 75 of the same Schedule. Ultimately, the final order was passed by the same officer against the petitioner under rule 76(1) of the same Schedule and that order is dated March 5, 1990, and, pursuant to that final order, the petitioner is detained in civil prison, Bhadra, Ahmedabad, under the said impugned order dated March 5, 1990 all throughout till date. In Special Criminal Application No. 157 of 1990, the petitioner has brought to challenge the order of his continuous detention, vide order dated December 30, 1989, which is an order passed under rule 75 of the Rules. He was challenged the mode of his incarceration pursuant to the said order by filling Special Criminal Application No. 387 of 1990, while he has challenged the final order of detention in civil prison dated March 5, 1990, by filling Special Criminal Application No. 721 of 1990. As all these three petitions are between the same contesting parties and as they are concerned with the main question about the legality of the orders of interim arrest, custody and detention in civil prison of the petitioner in connection with the certificate of recovery issued against the petitioner by the Income Tax authorities for realising Income Tax dues for the assessment year 1984-85 and as they raise common questions of law and fact, they were heard together by concerned of the learned advocates for both the sides and are being of by this common judgment.

At the outset, it may be stated that Special Criminal Application No. 157 of 1990 which has challenged the interim custody order passed by the Tax Recovery Officer against the petitioner on December 30, 1989, does not survive for consideration at this stage as the interim custody order has merged in the final order passed under rule 76(1) of the Rules by the Tax Recovery Officer on March 5, 1990. Hence, the interim custody order has exhausted itself. Consequently, the challenge to the said order would obviously not survive. It may also be stated that Special Criminal Application No. 387 of 1990 which deals with the mode of incarceration of the petitioner pursuant to the interim custody order of December 30, 1989, would also not survive as from March 5, 1990, the petitioner is detained in civil prison pursuant to the order under rule 76(1). It is in view of this situation that Mr. Kapadia for the petitioner concentrated his attack on the final order of March 5, 1990, and argued Special Criminal Application No. 721 of 1990 in extenso. It is this petition which was heard in detail by us. We have considered the contentions canvassed by learned advocate for the petitioner and Mr. Raval for the Income Tax authorities which are the main contesting respondents in the present proceedings.

Mr. Kapadia, for the petitioner, raised the following contentions for attacking the impugned final order of detention of the petitioner in civil prison as passed by the Tax Recovery Officer on March 5, 1990 :

(1) That the conditions precedent to the exercise of powers under rule 76(1) read with rule 73(1) have not been satisfied in the present case and the Tax Recovery Officer has not arrived at any finding on these conditions and, consequently, his order at annexure A to Special Criminal Application No. 721 of 1990 is null and void and liable to be quashed.

(2) It was alternately contended that even if the said order is held to be valid, even in that case, the petitioner''s continued detention in civil prison pursuant to the said order has become illegal as the petitioner can be detained in civil prison for a period of six months in all, as required by rule 77 of the Second Schedule and this period of six months will start not from March 5, 1990, the date of the final order, but from the date on which the petitioner''s liberty was curtailed by ordering his arrest under rule 73(2) and which detention was continued under rule 75 from December 30, 1989. In short, it was contended that, in any case, six months'' period of detention which is the maximum period of detention in prison contemplated by rule 77 should be counted from December 30, 1989. In that view of the matter, by June 30, 1990 six months'' period has already come to an end and consequently, as on date, the petitioner forthwith be directed to be released from detention in civil prison.

Replying to the aforesaid contentions, Mr. Raval, for the Income Tax authorities, vehemently contended that the impugned order of March 5, 1990, when read in a comprehensive manner, does contain an implied satisfaction on the part of the Tax Recovery Officer that the requisite conditions under rule 73(1) (a) and (b) were satisfied and, hence, the final order dated March 5, 1990, under rule 76(1) cannot be said to have been passed without satisfying the conditions precedent for passing the said order.

So far as the second contention was concerned, Mr. Raval joined issue and submitted that the maximum period of six months which is provided by rule 77 deals with the period of detention after the final order is passed under rule 76 (1) and cannot take in its wake the period spent in interim custody pursuant to the order under rule 75 or the period spent after arrest under rule 73(2). That, if this view is not taken it will result in rewriting rule 77 and introducing a provision like set off as found in section 428 of the Criminal Procedure Code which is conspicuous by its absence in rule 77. It was lastly contended by Mr. Raval for the taxing authorities that, if this court comes to the conclusion that the impugned order dated March 5, 1990, suffers from non-compliance with the conditions precedent for exercise of powers under rule 76(1) read with rule 73(1) then, in that case, in the interest of justice, proper directions should be issued to the taxing authorities to pass appropriate orders in the light of these provisions otherwise, the petitioner who is a Pakistani national and who was involved in smuggling of gold worth Rs. 140 lakhs and for which activities he was convicted under the provisions of the Customs Act and had suffered for seven years and which sentence was confirmed up to the Supreme Court once released from detention in civil prison would go out of the country and the Income Tax recovery would get frustrated and the assessment order would remain a paper order and such huge dues will have to be written off, that it would cause irreparable injury to the public exchequer. In this connection Mr. Kapadia, for the petitioner rejoined by submitting that once the impugned order is found to be illegal as not complying with the conditions precedent as laid down by rule 73(1) (a) or (b), there will remain no occasion to permit the respondents to pass a fresh order as a full inquiry was already made by the Tax Recovery Officer and thereafter he has passed the impugned order and if he has not passed a legally supportable order he has to thank himself and he cannot be given a second innings.

In the light of the aforesaid rival contention, the following points arise for our consideration :-

(1) Whether the impugned order dated March 5, 1990, at annexure ''A'' to Special Criminal Application No. 721 of 1990 is null and void being de hors the provisions of rule 73(1) read with rule 76(1) of the Second Schedule to the Income Tax Act, 1961.

(2) Whether the ceiling of six month for detention in civil prison as provided by rule 77 includes the periods during which the alleged defaulter remained in custody after arrest ordered under rule 73(2) and during the period he remained in interim custody of the officer as directed by the Tax Recovery Officer in exercise of his powers under rule 75 or whether the six month period will start only after the final order is passed under rule 76(1), viz., from March 5, 1990, onwards.

(3) What appropriate final orders can be passed by this court in the present proceedings.

Before we proceed to take up for consideration these points for determination, it would be appropriate to have a look at the background facts which are admitted or which are well-established on the record of the case and in the light of which these points for determination were pressed for our consideration by the rival parties.

Background facts : As stated by the petitioner in his petition, he is a Pakistani national and he permanently resides at Karachi, Pakistan. That he entered India on October 10, 1981, for a period of 90 days on the basis of a Pakistan passport and visa issued by the Consulate General of India, at Karachi, so as to meet his near relatives in India. The petitioner, during his visit to India came to Ahmedabad from Bombay on February 15, 1982, to meet one of his friends. The customs authorities raided the premises in the Sweta Park Society, Ahmedabad, and seized gold worth Rs. 140 lakhs along with some documents from the possession of the petitioner. The petitioner was prosecuted under various laws and he was convicted and sentenced to suffer rigorous imprisonment for seven years and to pay fine of Rs. 5 lakhs Mr. Kapadia informed us that this punishment has been confirmed up to the Supreme Court and the petitioner has served out the sentences and also further sentence in default of payment of fine of Rs. 5 lakhs as he had not paid the fine. The petitioner was also preventively detained under the provision of the COFEPOSA Act but his preventive detention was quashed by the Supreme Court in a writ petition filed by him under article 32 of the Constitution and he was ordered to be released from detention. The said decision of the Supreme Court has been reported in Ibrahim Ahmad Batti alias Mohd. Akhtar Hussain alias Kandar Ahmed Wagher alias Iqbal alias Gulam Vs. State of Gujarat and Others, . It, therefore, appears that the petitioner, who is well known as Kadar Bhatti, is a foreign national and was involved in an international racket of smuggling of gold and a huge quantity of gold seized from his possession years back in 1982. It also appears that the petitioner has international contracts. It is alleged by the Income Tax Department that various remittances from Dubai were received by the petitioner and that indicated his income and that is how the Income tax officer initiated proceedings against him for assessing his income under the provisions of the Income Tax Act. For the assessment years 1982-83 and 1983-84, the petitioner was assessed to Income Tax to the tune of Rs. 35,23,82,093 but we are told that these assessment orders are quashed in appeal and all the matters are remanded to the Income Tax Officer for fresh assessment. In the mean time, by a tax recovery certificate dated July 25, 1989, the Income Tax Officer requested the Tax Recovery Officer to recover the tax arrears from the petitioner but the certificate as become otiose in view of the quashing of the assessment orders in appeal. However, so far as assessment year 1984-85 is concerned, the petitioner was assessed to income tax and the income tax dues of Rs. 6,69,635 were held payable for the said assessment year. Mr. Kapadia submitted that the petitioner has already filed an appeal against the said assessment order for assessment year 1984-85 but the appeal is being delayed for one reason or the order and is still not decided. In the meantime, the Income Tax Officer initiated proceedings for recovering Income Tax for the year 1984-85 and issued a tax recovery certificate dated October 16, 1989. The said certificate was received by the Tax Recovery Officer somewhere in the closing month of 1989. The Tax Recovery Officer, for the reasons recorded; in writing dated December 5, 1989, passed an order of arrest of the petitioner under rule 73(2) of the Second Schedule on the ground that the petitioner who is a foreign national was likely to go away from the local jurisdiction of the Tax Recovery Officer resulting in delayed execution of the certificates. It appears that the said arrest order could not be served on the petitioner as, art the relevant time, he was under preventive detention pursuant to the order passed by the Competent Authority under the National Security Act. Hence a fresh warrant was issued on December 22, 1989, and it was executed on December 30, 1989. When the petitioner was released from detention in Civil Jail, Bhadra, where he was kept after he was released from preventive detention under the National Security Act, pursuant to the request made by the customs authorities to the District Collector for arresting the petitioner in civil prison for recovery of the customs duty. By an order dated December 30, 1989, the petitioner was kept in interim custody under rule 75 of the Rules with the Superintendent, Ahmedabad Central Prison, as directed by the Tax Recovery Officer and, ultimately, by order dated March 5, 1990, the impugned final order under rule 76(1) directing detention of the petitioner in civil prison has been passed, pursuant to which the petitioner is undergoing detention in civil prison at Bhadra, Ahmedabad, till date.

Having noted to these introductory facts, it will be necessary, now, for us to have a look at the relevant statutory provisions before we proceed to deal with the main points for determination.

Statutory background : Section 222 of the Income Tax Act deals with certificate to be issued to the Tax Recovery Officer and provides that when an assessee is in default or is deemed to be in default in making payment of tax, the Tax Recovery Officer may draw up under his signature a statement in the prescribed form specifying the amount of arrears due from the assessee and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule :

(a) attachment and sale of the assessee''s movable property;

(b) attachment and sale of the assessee''s immovable property;

(c) arrest of the assessee and his detention in prison;

(d) appointing a receiver for the management of the assessee''s movable and immovable properties.

9 When we turn to the Second Schedule, we find provided therein the procedure for recovery of tax. Part I gives the definitions wherein "defaulter" is stated to mean the assessee mentioned in the certificate, and "certificate" means one drawn up by the Tax Recovery Officer u/s 222. "Execution" in relation to a certificate means recovery of arrears in pursuance of the certificate; while "officer" means a person authorised to make an attachment or sale under this Schedule. Rule 4 in Part I in the said Schedule prescribed the mode of recovery and indicates the very same four modes mentioned in section 222 referred to above. The Second Schedule deals with different modes of recovery. We are concerned in the present case with recovery of tax under the certificate, by the mode of arrest and detention of defaulter. The mode is dealt with in Part V of the Second Schedule. It Starts with rule 73 and ends with rule 81. It would be necessary to refer to the relevant rules in this part. Rule 73(1) provides for notice to show cause and states that no order for the arrest and detention in civil prison of a defaulter shall be made unless the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause why he should not be committed to civil prison and unless the Tax Recovery Officer, for reasons recorded in writing, is satisfied :

(a) that the defaulter, with the object or effect of obstructing the execution of the certificates has, after the drawing up of the certificate by the Tax Recovery Officer, dishonestly transferred, concealed or removed any part of his property or,

(b) that the defaulter has, or has had since the drawing up of the certificate by the Tax Recovery Officer, the means to pay the arrears or some substantial part thereof and refuses or neglected to pay the same.

Sub-rule (2) of rule 73 provides for issuance of a warrant for the arrest of the defaulter in the first instance if the Tax Recovery Officer is satisfied, by affidavit or otherwise, that with the object or effect of delaying the execution of the certificate, the defaulter is likely to abscond or leave the local limits of the jurisdiction of the Tax Recovery Officer. Sub-rule (3) of rule 73 deals with other contingencies and provides that the arrest warrant may be issued against a defaulter in case where the defaulter fails to appear before the Tax Recovery Officer pursuant to the notice issued and served on him under sub-rule(1). As per sub-rule (4) of rule 73, every person arrested in pursuance of a warrant of arrest under this rule shall be brought before the Tax Recovery Officer issuing the warrant as soon as practicable and in any event within twenty-four hours of his arrest excluding the time required for the journey.

Rule 74 provides for hearing of the defaulter by the Tax Recovery Officer and states that when a defaulter appears before the Tax Recovery Officer in obedience to a notice to show cause or is brought before the Tax Recovery Officer under rule 73, the Tax Recovery Officer shall give the defaulter an opportunity of showing cause why he should not be committed to the civil prison. This hearing will comprise giving an opportunity to the defaulter to show cause why he should not be committed to civil prison. Rule 75 deals with custody pending hearing and lays down that pending the conclusion of the inquiry, the Tax Recovery Officer may, in his discretion, order the defaulter to be drained in the custody of such officer as the Tax Recovery Officer may think fit or release him on his furnishing security to the satisfaction of the Tax Recovery Officer for his appearance when required, and then follows rule 76(1) which lays down that, upon the conclusion of the inquiry, the Tax Recovery Officer may make an order for the detention of the defaulter in civil prison and shall, in that event, cause him to be arrested if he is not already under arrest. Under the proviso to rule 76(1) in lieu of passing of an order of detention, the Tax Recovery Officer may give an opportunity to the defaulter to satisfy the arrears. Then occurs rule 77 which lays down the ceiling in connection with detention in civil prison. It states that every person detained in the civil prison in execution of a certificate may be so detained :

(a) Where the certificate is for a demand of an amount exceeding Rs. 250 for a period of six months, and

(b) in any other case-for a period of six weeks. Rules 78 and 79 deal with release of the defaulter after detention in contingencies provided in these rules. They further provide that if a defaulter is rearrested, the period of his detention in the civil prison shall not in the aggregate exceed that authorised by rule 77. Rest of the rules in this part are not material for our purpose and hence we need not mention them.

The present controversy will have to be resolved in the background of the aforesaid statutory provisions.

Point No. 1 : So far as this point is concerned, a conjoint reading of rule 76(1) and rule 73(1) clearly indicates that no final order of detention in civil prison may be passed by the Tax Recovery Officer against any defaulter unless the Tax Recovery Officer, for reasons to be recorded in writing, is satisfied that either the defaulter, with the object or effect of obstructing the execution of the certificate has, after drawing up of the certificate by the Tax Recovery Officer, dishonestly transferred, concealed or removed any part of his property or the Tax Recovery Officer is satisfied that the defaulter has, or has had since the drawing up of the certificate by the Tax Recovery Officer, the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same. These are the conditions precedent on which relevant satisfaction has to exist on the part of the Tax Recovery Officer before he can pass the final order of detention of the defaulter in civil prison. The final order is to be passed under rule 76(1) after hearing the defaulter as per rule 74. Now, if we turn to the impugned order dated March 5, 1990, annexure A to Special Criminal Application No. 721 of 1990, we find that, after narrating the past history of the case and mentioning the events that transpired during inquiry, the satisfaction which is recorded by the Tax Recovery Officer for passing the impugned order is mentioned in paragraphs 10 and 13 of the order as under :

"10.... it was clear that no purpose would be served by prolonging the enquiry merely for want of necessary details of bank accounts which Mr. Bhatti had himself promised to furnish. Further, looking to the facts and circumstances of the case, and on the basis of enquiries conducted, I was satisfied that Mr. Bhatti was likely to leave the local limits of my jurisdiction with the object or effect of delaying or obstructing the execution of recovery certificate. Therefore, on February 5, 1990, the enquiries were concluded and a final order for his detention under rule 76(1) of the Second Schedule to the Income Tax Act, 1961, was decided to be passed."

"13. In view of the facts and circumstances narrated above, I am satisfied that the conditions laid down in rule 73(2) of the Second Schedule to the Income Tax Act, 1961, are fully satisfied in this case. Since the defaulter has failed to discharge the liability, I hereby order that the defaulter shall be committed to the civil prison situated in the city civil court compound, Bhadra, Ahmedabad, under rule 77 of the Second Schedule to the Income Tax Act, 1961, for six months form the date of his committal."

The aforesaid satisfaction recorded in the order clearly indicates that the Tax Recovery Officer thought it fit to pass the impugned order under rule 76(1) only because he was satisfied that the conditions in rule 73(2) were satisfied. Now, what he is expected to decide was as to whether the conditions precedent as laid down in rule 73(1) (a) or (b) were satisfied or not. Unless either of these conditions or both are satisfied, the Tax Recovery Officer will not have jurisdiction to pass the final order of detention under rule 76(1) read with rule 73(1). Such satisfaction is nowhere recorded in the impugned order. Mr. Raval for the Revenue was at pains to point out to us that such satisfaction can be said to be implicit in the order he had noted the events that happened during the inquiry before him. That he was noted that the defaulter was called upon to furnish details about his bank accounts both at Karachi and Dubai and he went on promising in that connection, but did not produce details of these accounts and when the defaulter was a Pakistani national and was likely to go out of the country, there was no alternative left with the Tax Recovery Officer but to pass the impugned order. This is neither here nor there. Whatever may be background of these facts and circumstances leading to the present proceedings and whatever may be the credentials of the defaulter, no final order of detention in civil prison can be passed against such defaulter unless both or either of the conditions laid down in rule 73(1) (a) or (b) are satisfied. It has to be noted that satisfaction for ordering interim arrest of the defaulter under rule 73(2) is of an entirely different type. While exercising the powers of interim arrest under rule 73(2), all that the Tax Recovery Officer has to be satisfied about is the fact that the assessee is a defaulter and that, with the object or effect of delaying the execution of the certificate, the defaulter is likely to abscond or leave the local limit of the jurisdiction of the Tax Recovery Officer. This satisfaction can be reached by him on affidavit or even otherwise. Now, on the facts of the present case, it cannot be disputed that the petitioner was a defaulter as he was an assessee mentioned in the certificate and had not paid the Income Tax dues. It also cannot be disputed that the petitioner himself had stated that he was a Pakistani national and he was not authorised to remain in India after the period mentioned in his visa was over and which was long since over. It also cannot be disputed and in fact Mr. Kapadia made it clear before us that the detenu wants to leave India immediately and in fact there is an order of deportation passed against him by the State of Gujarat directing him to be deported out of Indian territory and that the Deputy Commissioner of Police, Special Preventive, Ahmedabad, by his order dated June 27, 1990, has already passed an order in exercise of powers conferred on him by clause (c) of sub-section (2) of section 3 of the Foreigners Act, that the petitioner, Kadar Bhatti, would not remain in India after the date on which this order is served on him and shall leave India immediately. Under this circumstances, on the admitted facts, on the record of this case, the Tax Recovery Officer could legitimately be satisfied that the defaulter was likely to leave the local limits of his jurisdiction and that will have effect of delaying the execution of the certificate. In fact, the effect would be that the execution of the certificate would be totally frustrated once the defaulter goes to Pakistan. But, Mr. Kapadia''s submission was that there was no affidavit before the Tax Recovery Officer at the stage of passing of the arrest order under rule 73(2). However, rule 73(2) provides that even otherwise on any other available material, the Tax Recovery Officer can be satisfied and even order interim arrest. This was done by him as early as on December 22, 1989. But even if the circumstances then existing and which are existing till date might have enabled the Tax Recovery Officer to order interim arrest under rule 73(2), the satisfaction underlying the order had nothing to do with the requisite satisfaction required to be reached by the Tax Recovery Officer while ordering final detention of the defaulter in civil prison under rule 76(1). The affidavit-in-reply filed by the Tax Recovery Officer also avers that the requisite satisfaction arrived at by him for passing the impugned order is reflected by the order, meaning thereby, excepting what is stated in the order, there is nothing else to show that the requisite satisfaction is arrived at by him. As we have noted earlier, the order does not recite any such requisite satisfaction under rule 73(1)(a) or (b).

There cannot be any implied satisfaction on this aspect as submitted by Mr. Raval. It should be noted that rule 73(1) mandates recording of express reasons as required by rule 73(1) (a) or (b) before any final order under rule 76(1) read with rule 77(1) can be passed. No such satisfaction is recorded in the impugned order. Consequently, it must be held that the impugned order dated March 5, 1990, is passed without arriving at the requisite subjective satisfaction to support such an order, and hence it being contrary to an ultra vires rule 73(1), is required to be held null and void. The first point for determination is, therefore, answered in favour of the petitioner and against the Revenue. Before parting with discussion on this point, we may refer to the decisions to which our attention was invited by the learned advocates for the parties. In the case of Koli Lambhabhai Bhanabhai and Another Vs. Shukla Harilal Narmadashanker, , A. P. Ravani J., while considering section 51 of the Code of Civil Procedure, ruled that a judgment-debtor should be afforded an opportunity to show cause why he should not be committed to prison and the court is also required to be satisfied and the court must record a finding to that effect. The Supreme Court had also an occasion to consider the same section in the case of Jolly George Varghese and Another Vs. The Bank of Cochin, . Krishna Iyer J., speaking for the Supreme Court, while dealing with section 51 read with Order 21, rule 37, Civil Procedure Code, observed that (headnote) :

"The simple default to discharge the decree is not enough. There must be some element of bad faith beyond mere indifference to pay, some deliberate or recusant disposition in the past or alternatively, current means to pay the decree or a substantial part of it. The provision emphases the need to establish not mere omission to pay but an attitude of refusal on demand verging on dishonest disowning of all obligation under the decree, (and that merely because a person is poor, he cannot be incarcerated in execution of money decree against him)."

The aforesaid principles are well-settled and even the provisions of rule 73(1) read with rule 76(1) encompass the requisite conditions precedent to the satisfaction in a given case before a defaulter can be detained in civil prison. On the facts of the present case, these conditions are not held satisfied and hence the impugned order of detention in civil prison cannot be sustained. Mr. Raval contended, placing reliance on The Collector of Malabar, Kozhikode and Another Vs. Erimmal Ebrahim Hajee, ; The Collector of Malabar, Kozhikode and Another Vs. Erimmal Ebrahim Hajee, and Ram Narayan Agarwal and Others Vs. State of Uttar Pradesh and Others, , that arrest and detention in civil prison for recovering tax arrears do not amount either preventive detention or punitive detention but are only a mode of recovery of public dues and consequently, if some coercion is found to have been exercised against a defaulter, it would not vitiate the exercise. There cannot be any dispute on these propositions which are well-settled. However, the moot point is whether the impugned order is in accordance with the rules and regulations or it is de hors and ultra vires these rules. In the present case, the order is ex facie contrary to rule 73(1) as discussed earlier.

Point No. 2 : This point was canvassed in the alternative by Mr. Kapadia. So far as this point is concerned, it has to be kept in view that the maximum period of detention in civil prison as prescribed by rule 77 is the period of six months in case the certificate is for the demand of an amount exceeding Rs. 250 and as in the present case, the demand is for Rs. 6,69,635, the ceiling limit would be of six months. There is no dispute on this point. However, Mr. Kapadia submitted that, for computing this period of six months, the time spent by the detenu in interim detention from December 30, 1989, should also be taken into consideration. To support this contention, Mr. Kapadia submitted, placing reliance on the decision of the Bombay High Court in the case of Emperor v. Lallu Wachji [1919] Crl. LJ 391, that physical contract is not necessary to complete physical possession depends upon the physical possibility of the possessor dealing with the thing exclusively. That case was dealing with preparation of a panchnama by the Mamlatdar declaring buffalows to be under attachment as per section 154 of the Bombay Land Revenue Code. The question was whether merely because a panchnama declaring buffalows to be under attachment was made, the buffalows can be said to have been in the possession of the Mamlatdar. Answering this question in the affirmative, the Division Bench ruled that physical contact is not necessary to complete physical possession. We fail to appreciate how this decision can be of any assistance to Mr. Kapadia. Here, we are not concerned with any constructive possession of the defaulter by the Tax Recovery Officer. He had passed two interim orders against him, one was of interim arrest under rule 73(1) which to last for 24 hours and the second one was on interim custody pending hearing as per rule 75. None of them can be said to be an order of detention in civil prison. However, Mr. Kapadia submitted that these interim orders also can be said to have been passed in execution of the certificate as they were not intermediate steps towards execution of the certificate and that they were taken in the process of recovery of Income Tax dues. That may be so. However, for the purpose of applicability of the ceiling for detention in civil prison and for attracting rule 77(1), the following conditions are required to be satisfied :

(i) the concerned person must be detained;

(ii) such detention must be in civil prison; and

(iii) such detention must be in execution of the certificate.

Mr. Kapadia submitted that, in the present case, all the three conditions are satisfied. Mr. Raval submitted to the contrary. Let us, therefore, consider as to whether the aforesaid three conditions for applicability of rule 77(1) are satisfied in the present case. At the stage of issuance of the interim arrest order under rule 73(2), there was no question of detaining the petitioner in civil prison. That occasion had not arisen. It was merely an interim arrest order lasting for 24 hours and its purposes was to bring him before the Taxing Officer as laid down by rule 73(4) read with rule 74. That interim arrest was for the purpose of procuring the presence of the defaulter before the Tax Recovery Officer so that a hearing can be given to the defaulter in the inquiry against him. Consequently, the order of interim arrest cannot be said to be detention of the defaulter in civil prison in execution of the certificate. So far as interim custody as provided by rule 75 is concerned, Mr. Kapadia is right when he contends that rule 75 deals with detention, but in the context in which the term "detention" is used in rule 75, no doubt is left in our mind that the said detention as an interim measure is pending conclusion of the inquiry and it has nothing to do with final order which can be passed at the conclusion of the inquiry. It is in interim detention under which a defaulter can be entrusted to the custody of such officer as the Tax Recovery Officer may think fit pending conclusion of the inquiry. Such interim detention cannot be said to be detention in civil prison and that too in execution of the certificate. Detention in civil prison in execution of the certificate would be pursuant to the final order of detention that can be passed at the conclusion of the inquiry by the Tax Recovery Officer under rule 76(1) read with rule 73(1). Consequently, even accepting the contention of Mr. Kapadia that interim custody under rule 75 may amount to detention, it would not be covered by rule 77(1) for two obvious reasons. It would not be detention in civil prison and secondly, it would not be in execution of the certificate. Detention in execution of the certificate would be a final detention order in lieu of recovery of arrears pursuant to the certificate as the term "execution" is defined by rule 1(c) accordingly. It is interesting to note that, as per rule 75, interim detention may be in the interim custody of any officer is decided by the Tax Recovery Officer and that officer may not be an officer necessarily in charge of a civil prison. In fact, in the present case, interim custody of the petitioner was directed to be handed over from December 30, 1989, to the Superintendent in charge of Ahmedabad Central Prison. Even though the said officer was directed to give all facilities to the petitioner as a civil prisoner, he was obviously not an officer in charge of the civil prison. But even that apart, detention in the custody of an officer as directed by the Tax Recovery Officer as an interim measure pending conclusion of the inquiry is miles away from the ultimate detention of the defaulter in civil prison in execution of the certificate. We must, therefore, hold, repelling the contention of Mr. Kapadia, that the ceiling limit of six months or six weeks of detention in civil prison as provided by rule 77(1) attaches to the final order of detention under rule 76(1) and does not take in its sweep any period spent in interim custody pursuant to the orders passed under rule 75 or any time spent after interim arrest as per rule 73(2). We may mention at this stage the apprehension voiced by Mr. Kapadia. He submitted that if this construction is adopted on the applicability of rule 77(1), then in that case, a Tax Recovery Officer may deliberately or otherwise prolong the inquiry pending interim custody under rule 75 for more than six months and thereafter pass a final order of detention and the result would be that the defaulter may remain in detention for more than one year. This is neither here nor there. If it was the intention of the rule-making authority to avail of such contingency and to club such period of interim custody with the period of final detention, rule 77(1) would have been suitably amended or drafted. But that has not been done. It is also pertinent to note that there was no provision like section 428 of the Criminal Procedure Code in rule 77. Even prior to the enactment of section 428, many times it used to happen that imprisonment as an under-trial prisoner used to exceed even the final period of sentence of conviction imposed upon the concerned offender. With a view to plugging such loopholes Parliament intervened by enacting section 428 and provided for set-off of imprisonment as under trial prisoner while computing final sentence of imprisonment imposed on the accused. Such a provision is conspicuously absent in rule 77. But even that apart, if, in any case, pending interim custody of the defaulter, it is apprehended by him that interim custody is being dragged on unnecessarily, he can move this court or the Supreme Court for issuance of appropriate directions to the concerned authorities to expedite completion of the inquiry. But so far as the express language of rule 77 goes, it is not possible to agree with the contention of Mr. Kapadia that six months provided therein must be treated so as to include the period spent during the interim custody or interim arrest by the defaulter. Consequently, it must be held that six months'' period pursuant to the order dated March 5, 1990, would start from March 5, 1990, and would end on September 4, 1990, and the period from December 30, 1989, till passing of the order dated March 5, 1990, cannot be included for computing the six-month period of detention in civil prison. The second point, therefore, is answered against the petitioner and in favour of the Revenue.

Point No. 3 : That leaves out the last point. Mr. Kapadia for the petitioner vehemently submitted that in the light of our conclusion on point No. 1, the petitioner must be ordered to be released forthwith from civil detention as the impugned order is held to be null and void and there remains no occasion for issuing any further direction to the respondent-authorities to pass appropriate orders against the petitioner. He submitted that the entire inquiry was completed by the Tax Recovery Officer and if he failed to pass appropriate orders which can be countenanced by law, he has himself to thank and no second opportunity should be given to him. Mr. Raval, on other hand, submitted, placing reliance on the decision of the Supreme Court in the case of Jolly George Varghese and Another Vs. The Bank of Cochin, , that the Supreme Court itself, while taking the view that conditions of section 51, Civil Procedure Code, had to be satisfied, remanded the proceedings to the executing court for coming to an appropriate conclusion on evidence and permitted the inquiry to go on in execution against the judgment-debtor. He also submitted, placing reliance on the decision of the Supreme Court in the case of Comptroller and Auditor-general of India, Gian Prakash, New Delhi and Another Vs. K.S. Jagannathan and Another, , that, in exercise of the powers under article 226 of the Constitution, we can pass the same orders which the subordinate authority can pass. In this connection, he invited our attention to the following pertinent observations made by Madon J., speaking for the Supreme Court (headnote) :

"The High Courts exercising their jurisdiction under article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the direction conferred upon it by a statute or rule or a policy decision of the Government or has exercised such discretion mala fide or irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case, High Court can, in the exercise of its jurisdiction under article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the court may itself pass an order or give directions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion."

He further submitted that the facts of the present case are peculiar. As admitted by the petitioner himself, he is a Pakistani national. He has no moorings in India. He has admitted before the Tax Recovery Officer that he has no property in his name in India. It his case that he has no property in his name elsewhere either in Pakistan or any other part of the world. It is his case that, in the two bank accounts in his name, one in the Bank of Oman at Dubai and another in the United Bank Limited at Karachi, there is negligible balance and from which these tax arrears cannot be met. Mr. Kapadia produced xerox copies of two statements of accounts showing that, in the Bank of Oman Limited at Dubai, there is balance of 218.22 Dirham in the name of the petitioner while in the Karachi bank account, there is balance of Rs. 894 only. That it is his case that he is to be deported out of India the moment he is released from civil prison. Thus, it is almost certain that he will immediately go out of India the moment he is released from civil prison. If that happens, the tax recovery certificate will become a paper order and there will be a huge loss to the public exchequer. If such loss is inevitable, the amount of tax dues will have to be treated as a bad debt and that consequence may ultimately follow. But, before that eventually happens, a fair chance should be given to the Revenue to arrive at a correct conclusion about the financial capacity of the petitioner who was involved in an international racket of gold smuggling and who is convicted under the Customs Act as he was caught red-handed at Ahmedabad and was found in possession of smuggled gold worth Rs. 140 lakhs years back. He, therefore, submitted that, on the peculiar facts of this case, it cannot be said or even whispered that the petitioner is a pauper or a non-entity. That it appears that the petitioner is suppressing his real financial capacity and he is out to defraud the Revenue. Consequently, the interest of justice demands that we permit the Tax Recovery Officer to come to an appropriate finding as required by rule 73(1) read with rule 76(1). That such an exercise was never undertaken by the Tax Recovery Officer earlier. That this is not a case in which an exercise was undertaken by reaching a finding under rule 73(1) in connection with the conditions precedent. If such an exercise was once undertaken by the Tax Recovery Officer and it was found to be unsustainable on records, the question of giving a second innings to the Tax Recovery Officer might arise but as we ourselves have held, the order shows that the Tax Recovery Officer addressed himself to rule 73(2) satisfaction and passed the final order under rule 76(1). Thus, he has, until now, not considered even once whether the conditions precedent for passing an order under rule 76(1) read with rule 73(1) had existed or not in the case of the petitioner and hence, that opportunity, if given in the interest of justice, on the peculiar facts of this case, would amount to giving such opportunity for the first time only.

We find considerable force in the aforesaid contention of Mr. Raval. This is not a case in which allegedly poor judgment-debtor is being sought to be detained on account of his poverty. He is a foreign national having no mooring in India, but he is found to have been involved in an international racket of gold smuggling. Naturally, he would have connections not only in this country but in various parts of the world. It is also an admitted position that he has bank account at Dubai in Oman Bank Limited. Further details given in his statement before the Tax Recovery Officer show that the petitioner was dealing in business of fisheries and he used to go to Dubai ostensibly in connection with that business. It cannot be forgotten that the petitioner is clamouring from house tops that he wants to go to Pakistan the moment he is released from detention. It is also not in dispute that the tax recovery certificate issued against him shows large arrears of more than Rs. 6 lakhs. Under these circumstances, the Tax Recovery Officer at least once has to give a finding as to whether the requirements of rule 73(1) (a) or (b) are satisfied or not. If these request of the Revenue is not accepted, irreparable injury will be caused to the public exchequer and so far as the petitioner is concerned, without facing any proper inquiry in that connection, though he is admittedly an Income Tax defaulter, he would promptly go out of the country and there would be no possibility whatsoever of again tracing him or recovering the tax arrears and they will, of necessity have to be treated as a bad debt. On the other hand if such an opportunity us given to the Revenue, the petitioner is not going to suffer any substantial loss as Mr. Raval, for the Revenue, fairly stated that in the light of our decision on point No. 2, maximum detention of the petitioner in civil prison on execution of the certificate in question would be for a period of six months from March 5, 1990, meaning thereby, that on the midnight of September 4, 1990, that the detention would come to and end and even though that order is being quashed and set aside by us, he agrees that if any fresh order of detention so passed against the petitioner under rule 76(1) read with rule 73(1), in execution of the certificate for recovery of tax of Rs. 6,69,635, its life will not be beyond September 5, 1990, and it would stand exhausted accordingly. This fair concession on the part of the respondents allays any fear that the petitioner may have, viz., that if a fresh detention order is passed, he will be further detained fir six more months. In fact such a fear would be totally uncalled for in the light of the express language of rule 77 and the concession given by the learned advocate for the Revenue which is not only fair but is well-justified in the light of the statutory settings the aforesaid provision. Consequently, we deem it fit to pass the following order :

(1) Even though the impugned order dated March 5, 1990, is quashed and set aside, the petitioner will not be released from civil detention but in the first instance, from the date of our present order, he will be treated to be in interim custody as per rule 75 of the rules and the officer in charge of the civil prison at Bhadra, Ahmedabad, will keep the petitioner in custody pending further orders of the Tax Recovery Officer as indicated hereinbelow. This interim custody will be for a period of two weeks from our present order. In the meantime, the Tax Recovery Officer is directed to issue a show cause notice to the petitioner and to hear him both about the need to continue his detention by way of interim custody beyond the period of two weeks as per rule 75 and also to hear him as per rule 74 by giving him an opportunity to show cause why he should not be committed to civil prison as per rule 76 (1) read with rule 73(1). This opportunity should be given to him within the aforesaid period of two weeks and thereafter, the Tax Recovery Officer may pass appropriate orders both under rule 75 for continuing to keep him in interim custody beyond the period of two weeks and also under rule 76(1) read with rule 73(1) in the light of the existing material on record and whatever additional material the petitioner may choose to bring on record or the material which the Department may be able to gather in this inquiry. It is made clear that our present order directing interim custody of the petitioner for two weeks will be strictly without prejudice to the rights and contentions of both sides and should not be given any weight by the Tax Recovery Officer for pasting appropriate orders in exercise of his own discretion under rule 75 nor will it come in the way of the Tax Recovery Officer passing appropriate final orders under rule 76(1) read with rule 73(1) and such final order will be passed strictly on merits and in accordance with law after giving full opportunity to the petitioner as aforesaid in connections with both these orders.

(2) It is clarified that if the Tax Recovery Officer, in his discretion, thinks fit not to pass any further interim custody order under rule 75, beyond the period of two weeks, as directed by us in the present order, the detenu will be released from the interim custody and detention on the expiry of these two weeks. If, on the other hand, the interim custody order is extended by the Tax Recovery Officer, till the completion of the inquiry, the said interim order subject to its being stayed or quashed by any competent court when challenged by the petitioner in accordance with law, will operate till the inquiry is completed.

(3) In case the Tax Recovery Officer takes the view that no final order of detention is required to be passed under rule 76 read with rule 73(1) (a) or (b) as the conditions mentioned therein are not satisfied, the detenu will be released from detention. If, on the other hand, such detention order is passed under rule 76(1) read with rule 73(1), such order as and when passed shall have limited life up to the midnight of September 4, 1990, and therefore in any case, the petitioner will be released from detention in civil prison so far as execution of the tax recovery certificate for Rs. 6,69,635 for the assessment year 1984-85 is concerned.

(4) Such final detention order if passed will be subject to the challenge which the petitioner may like to mount on it and will also be subject to the decision of the competent court before which such challenge is mounted.

(5) The Tax Recovery Officer is directed to complete the entire exercise and to pass final orders under rule 76(1) read with rule 73(1) one way or the other on or before August 10, 1990. the third point is answered accordingly.

In the result, this petition is partly allowed as aforesaid. Rule issued in Special Criminal Application No. 721 of 1990 is made absolute to the limited extent indicated above and subject to the directions issued herein. Rule discharged in Special Criminal Application Nos. 157 of 1990 and 387 of 1990.